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Potential sectors for Investment in Bangladesh
Potential sectors for Investment in Bangladesh
Potential sectors for Investment in Bangladesh
Pharmaceutical Industries
Prepared by:
Akif Jafar
ID: R232024
Md Tahsin Rahman Khan
ID: R232027
Md. Farhan Islam
ID: R232017
Program: MBA
Semester: 4th
Submitted to:
Bangladesh has emerged as a promising destination for foreign direct investment (FDI) in
various sectors, with its conducive business environment, strategic location, and robust
economic growth. Among these sectors, the pharmaceutical industry stands out as a beacon of
opportunity, showcasing significant potential for both local and foreign investors.
The pharmaceutical sector in Bangladesh has experienced remarkable growth over the past
few decades, driven by a combination of factors such as a large population base, increasing
healthcare awareness, and government initiatives to promote the industry. With a rapidly
expanding middle-class population and rising healthcare expenditure, the demand for
pharmaceutical products continues to surge, presenting lucrative prospects for investment.
Moreover, Bangladesh's pharmaceutical industry has earned international acclaim for its
high-quality generic drug manufacturing capabilities. Many pharmaceutical companies in the
country comply with stringent international standards and regulations, allowing them to
export their products to markets across the globe. This export-oriented approach has not only
bolstered the industry's revenue but has also enhanced Bangladesh's reputation as a reliable
supplier of pharmaceuticals worldwide.
Furthermore, the government of Bangladesh has implemented various policies and incentives
to attract foreign investment in the pharmaceutical sector. These include tax exemptions,
duty-free import of raw materials, and streamlined regulatory processes, making it easier for
investors to establish and operate pharmaceutical ventures in the country.
In light of these factors, foreign investors are increasingly turning their attention to
Bangladesh's pharmaceutical industry as a lucrative avenue for FDI. By capitalizing on the
country's growing healthcare market and its reputation for quality pharmaceutical
manufacturing, investors can position themselves to reap substantial returns and contribute to
the continued growth and development of Bangladesh's pharmaceutical sector.
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In this report, we will delve deeper into the opportunities and challenges present in
Bangladesh's pharmaceutical industry, exploring key investment considerations and strategies
for foreign investors looking to capitalize on this dynamic and rapidly evolving sector.
2. Objective
• To analyze the potential investment opportunities within the pharmaceutical sector of
Bangladesh.
3. Findings
Bangladesh Pharmaceutical Market Prior to 1982
Multinationals 8
4. Investment Potential
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The pharmaceutical industry in Bangladesh offers abundant investment potential, driven by
several factors that position it as an attractive destination for foreign direct investment (FDI).
Here are key aspects contributing to the investment potential in the sector:
Bangladesh boasts a large and rapidly expanding population, with a significant portion
belonging to the middle-income group. This demographic trend translates into a growing
demand for healthcare services and pharmaceutical products. With increasing healthcare
awareness and rising disposable incomes, the domestic market presents ample opportunities
for pharmaceutical companies to tap into.
2. Export Opportunities:
Bangladesh's pharmaceutical industry has gained recognition for its capacity to produce high-
quality generic drugs at competitive prices. Many companies have obtained certifications
from international regulatory authorities such as the US Food and Drug Administration
(FDA) and the European Medicines Agency (EMA). These certifications enable Bangladeshi
pharmaceutical firms to export their products to various markets worldwide, including
developed countries. Foreign investors can leverage this export potential to diversify their
market reach and enhance revenue streams.
3. Cost-Competitive Manufacturing:
One of the key advantages of investing in Bangladesh's pharmaceutical industry is its cost-
competitive manufacturing environment. The country offers relatively lower production costs
compared to many developed nations, attributed to factors such as affordable labor, land, and
utilities. This cost advantage enables companies to maintain competitive pricing for their
products in both domestic and international markets, fostering profitability and market
penetration.
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initiatives to enhance research and development (R&D) capabilities within the industry,
fostering innovation and technological advancement.
Foreign investors can explore opportunities for strategic partnerships and collaborations with
local pharmaceutical companies in Bangladesh. Collaborative ventures, such as joint ventures
or technology transfer agreements, enable investors to leverage the local expertise and market
knowledge of established players while contributing capital, technology, and managerial
know-how. Such partnerships can accelerate market entry and expansion strategies, enabling
investors to capitalize on the growing pharmaceutical landscape effectively.
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Healthcare Pharma 2,217 7.23%
The medicine manufacturers have already widened markets not only to South Asian nations
like Sri Lanka and Afghanistan but also booked a share in the United States with the third-
highest foreign-exchange earnings from the world's largest economy, they said Wednesday.
Out of the country's total $175.425 million worth of pharmaceutical-export earnings in the
last fiscal year (FY) 2022-23, the local drug-makers made a shipment worth $15.25 million to
the US market, Export Promotion Bureau (EPB) data showed.
They made highest exports to the Southeast Asian neighbouring-nation Myanmar, worth
US$25.818 million that accounts for 14.72 per cent of the total $175.425-million annual
turnover in the expansion process.
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Sri Lanka is the second-largest market for Bangladeshi pharmaceuticals importing $21.91
million worth of products.
An FE analysis has found that the United States of America (USA), the Philippines,
Afghanistan, Kenya, Cambodia, Vietnam, Pakistan, Nepal, Jamaica, Nigeria, Denmark,
Somalia and Australia among the top 15 importers after Myanmar and Sri Lanka.
The shipments dipped 7.08 per cent to $175.42 million in the last FY2023 from $188.78
million in the previous FY2022, the EPB data showed.
Zahangir Alam, Executive Director (Finance) Square Pharmaceutical Limited, told the FE
that just two decades ago Bangladesh's pharma-export market was in less than 30 countries.
Now it has expanded to more than 130 destinations.
They have been trying to expand their market to different destinations, including in America
and Europe.
"We have had a good market in Southeast Asia, Africa and the USA. Now we are trying to
widen to Latin America. The Latin American market is still untapped for Bangladesh's
pharmaceutical products," says the Square executive.
"Now we are working to enter the Latin American market as the Square Phrama has already
obtained certification from Brazil," Mr Alam adds on their plans for spreading wings wider.
"I hope Bangladesh's market diversification will be continued and the country's total export
volume will be boosted in the coming years," the Square Pharma ED told the FE.
Dr Arifur Rahman, a market analyst and honorary fellow of K2W Communications &
Research, sees huge potential of Bangladesh to expand its pharma market to different
Southeast Asian, African, CIA, Central Asian and Latin American countries.
"The government should facilitate the private sector to widen and diversify the
pharmaceutical market through offering more policy and fiscal support with the aim of
boosting the country's overall foreign-exchange earnings," he told the FE.
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According to ACI Pharma, the firm exports to 30 countries, including Kenya, Ivory Coast, the
Philippines, Nepal, and Myanmar. Besides, it also has product-marketing approval from 15
other countries.
Source: thefinancialexpress.com.bd
Although generic drugs are increasingly accepted by developed countries, the growth is
expected to be more strongly driven by the emerging markets, where the demana for generics
is forecasted to grow at a rate of 9% per annum.
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8.
Conclusion
In conclusion, the pharmaceutical industry in Bangladesh stands out as a promising sector for
foreign direct investment (FDI), offering a myriad of opportunities for investors seeking
sustainable growth and profitability. The sector's investment potential is underpinned by
several key factors, including a growing domestic market fueled by increasing healthcare
awareness and rising disposable incomes. Moreover, Bangladesh's pharmaceutical companies
have earned international recognition for their high-quality generic drug manufacturing
capabilities, enabling them to access export markets worldwide.
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